Jim Cramer's Best Blogs
Without Clarity, We're Stuck in a Down Spiral
Posted at 9:26 a.m., Feb. 25, 2009
Are the banks already "nationalized?" My friend David Reilly over at Bloomberg penned a piece this morning saying it's already happened.
But then the obvious response is, if we are nationalized, then why is there still independence? Why is Vikram Pandit able to say he wants to keep Banamex (which he should), and why is Wells Fargo (WFC) able to pay that huge dividend, a totally inconsistent payout that Peter Eavis highlights today in an excellent piece about capital ratios and how Wells' is inferior to JPMorgan's (JPM) yet only JPM cut the dividend.And why are the same boards of directors and officers that ran Citigroup (C) and run Bank of America (BAC), the two acknowledged problem kids (at least acknowledged by the banks), still there if we are nationalized? Which brings us to the semantics of the situation. Reilly points out we have nationalization of the system but no seizures. That's an oddity given that Sheila Bair -- my guest today on CNBC, on a show that runs tonight at 10 -- was actually nationalizing banks, in the "seizure" sense of the word a few months ago to prevent runs on the banks. In retrospect, did we need to do that? Did we need to truly nationalize, and how (speaking of inconsistencies) could we not seize BankAtlantic (BBX), Corus (CORS) or Bank United (BKUNA) and yet seize WaMu and Wachovia? How did those banks not get seized and WM and WB did? Oh, and while we are at it, why did the government seize the deposit institution that was Lehman -- it had billions in deposits -- and not seize AIG (AIG), which had no deposits and was totally rogue? All of these must be on the agenda. Someone has to clarify what the heck happened. Someone has to explain whether the principal method of bank funding -- preferreds -- gets wiped out, because if you wipe out preferreds, you are seizing and "nationalizing" in the old sense of the word is here.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV